Footnote to last week's breakaway article and a look ahead to Monday's article
Breakaways: Growth rate stuck in place
The most widely-read story in RIABiz during this past week told how the breakaway market is starting to snap back from its lackluster start to the year.
Barnaby Grist, managing director of strategic development for Schwab first tipped me off about the shift then Scott Dell’Orfano of Fidelity, Tom Nally of TD Ameritrade and Jim Dario of Pershing affirmed his view.
Each of these senior sales executives was effusive about the positive changes that they are seeing. There is a fresh crop of big brokers saying: I’ve had it; get me out now, they say.
One sobering point by Grist can be added to the story : Breakaway brokers signings rocket ahead for July that gives perspective about continuing challenges faced by asset custodians in their bid to convert stock brokers to RIAs,” he says. “Though significantly more brokers are breaking away from wirehouses in 2009, the rate of increase for this phenomenon remains at about 50%. “It’s the same growth of the last few years.”
Though this is a good rate of growth for any industry outside of donut chains, it still means that custodians need to be content with seeing just a few hundred brokers out of more than 60,000 make the leap to independence. “There’s been a lot of growth but it’s off a small base [of breakaways],” he adds.
Picking up on that theme, John Furey, a former Schwab executive, will publish a column here on Monday. In it he offers his thoughts about what forces are at work that could shift the breakaway market into higher growth gear. His discourse offers a new twist and a cause for optimism for the breakaway industry. Furey worked under Grist at Schwab and helped to build the company’s breakaway program.
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